Conversion Rate

What is that fancy word all online marketers are talking about? According to MarketingSherpa, The definition of conversion is “The point at which a recipient of a marketing message performs a desired action.” Typically conversion is seen as a completed purchase. Though, for example in social media marketing, the conversion goal can be a like on a Facebook page. Simply put, conversion is simply getting someone to respond to your call-to-action. Ryan Lillis provides a good aggregation on what conversion means in different contexts:

Site Type Common Conversion and Aggregate Goals
E-Commerce – a site that sells things for users to purchase online.
  • Completed purchase
  • Each step within the checkout funnel
  • Products added to cart
  • Product page views
Media/Content – a site focused on article or other content consumption.
  • Page views
  • Articles read
  • Bounce rate (when measuring within an A/B testing tool, this is often measured by seeing if the user clicked anywhere on the page)
Lead Generation – a site that acquires business through name capture.
  • Form completion
  • Clicks to a form page (links may read “Contact Us” for example)
Donation – a site aiming to collect donations.
  • Form completion
  • Clicks to a form page (links may read “Send a donation” for example)

Generally, a good conversion rate is somewhere around 2% to 5%. A good conversion rate is not that unambiguous; it varies from merchant to merchant and from industry to industry segment. You might have read one of my earlier posts about the marketing affiliate, Kiosked. The conversion rates they are able to provide their customers with are over 5%. Not bad?

In the physical retail world, the conversions are totally on a different level. Think about a visit to a grocery store: You have seen an effort when you have been driving there, trying to find a parking spot, maybe picked up your friend and paid for gasoline. Perhaps you don’t wanna see the effort again by changing the retail store and you don’t wanna leave empty-handed either. In the offline environment, the customer’s “switching costs” are higher, either in time, money or effort. When online, changing the retailer is just a click away and that’s why, online merchants have to pay attention on their conversion rates.

Sources http://sherpablog.marketingsherpa.com/marketing/conversion-defined/ http://meclabs.com/training/publications/browse-by-publication-type/handbooks http://blog.optimizely.com/2013/01/16/what-is-a-conversion/ http://www.wordstream.com/blog/ws/2014/03/17/what-is-a-good-conversion-rate#what-is-a-good-conversion-rate http://www.wordstream.com/blog/ws/2014/03/17/what-is-a-good-conversion-rate#

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About tonikarkkainen

I am Toni Karkkainen 28 years old marketing prospect from Finland. I am Soon to be graduated as a Master's of Science in Economics and Business Administration, from Lappeenranta University of Technology, Finland. I major in Strategy, Innovation and Sustainability and my two minors are of International Marketing Management and Strategic Management. I just finished my marketing minor in California State University in Fullerton, California and I am actively seeking for internship opportunities in the area. I am an innovation enthusiast and I have a natural curiosity in new trends and initiatives, especially when it comes to marketing and commerce in all of their respective channels. That is what I blog about is around these topics. I flag for open communication and sometimes I challenge to initiate discussion, thinking and exchange of ideas between people. I think a healthy self-critique is essential for the development of any individual or organization, including myself. I usually have lot of things to say, in good and in bad, but before this blog, I feel like I haven't had a proper forum to share and discuss about my thoughts. You are very welcome to comment and critique my posts, since they aren't necessarily "the absolute truths" about the topics, but rather my own opinions and thoughts on them. So be Brave! During my leisure time I go to gym, skate and surf, and I try to hang out with my friends always when I'm not busy with work and/or school. I am currently finishing up my studies in California State University where I have been studying for Strategic Internet Marketing, Retail Marketing Strategies, Marketing Information Technology and Consumer Behaviour. As mentioned, I'm in a search for a marketing internship, preferably in Los Angeles. Please see my LinkedIn and other social media platforms for my experience and contact information.
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